Sewerage connection may bypass some houses: water authority

South Gippsland Water says some residents of Loch, Poowong and Nyora could miss out on being connected to reticulated sewerage.

The water authority is likely to reduce the footprint of its original sewerage scheme because it needs to reduce the cost.

The Essential Services Commission ruled a $27 million scheme was too expensive but will allow $20 million to be funded from customers' water bills.

South Gippsland Water's Philipe Du Plessis says houses on bigger blocks on the outskirts of town could miss out.

"Now look it's fairly early days, we've got to test that with the regulators, we've also got to test what are the cost consequences and then we've actually got to talk to the community about what they think about that as well," he said.

Nyora resident Brett Hume says something needs to be done about the semi-raw sewage in the streets in the short-term.

Mr Hume says the community is waiting to hear what South Gippsland Water and South Gippsland Shire propose.

He says rain has soaked the soil and is causing effluent to become exposed.

"The water level is now almost to the top of the soil structure ...in the next weeks the effluent from the sceptic tanks will not be able to move away and as such will become the common problem that we experience over the wintertime," he said.